In RPO and others7 , the CJEU confirmed that, as regard the current EU VAT Directive, Member States cannot apply a reduced rate of VAT to the supply of digital books.


Under the VAT Directive, Member States may apply a reduced rate of VAT to printed publications such as books, newspapers and periodicals. By contrast, digital publications must be subject to the standard rate of VAT, with the exception of digital books supplied on a physical support (eg a CD-ROM).

The Polish Constitutional Court (PCC) doubted the validity of this difference in VAT treatment. The PCC asked the CJEU first, whether that difference was compatible with the principle of equal treatment and secondly, whether the European Parliament was sufficiently involved in the legislative procedure.

The Advocate General rejected the challenge. In his view, this difference in treatment was valid.

CJEU’s judgment

The CJEU dismissed the PCC’s challenge.

In reaching its conclusion, the CJEU acknowledged that there is a difference in treatment between the supply of digital books electronically and the supply of books on all physical means of support. However, in its view this is not contrary to the principle of equal treatment.

The CJEU also considered whether that difference is justifiable. It decided it was, on the basis that it aims to create legal certainty in an area which is subject to constant developments. The CJEU considered it was necessary to make electronic services subject to clear, simple and uniform rules in order that the VAT rate applicable to such services may be established with some certainty. By precluding the application of the reduced rate of VAT to electronic services there is no need to examine all electronically supplied services to determine whether they were within the terms of the exemption or not. The measure is therefore appropriate and achieves the objective of the regime for e-commerce.

As regards whether the European Parliament was sufficiently involved in the legislative process, the CJEU noted that due consultation with Parliament was an essential requirement. In circumstances where the final text adopted differs in essence from the text which Parliament has considered, Parliament must be consulted again. The only exception to this rule is where the amendments substantially correspond to the wish of Parliament itself. In this instance the CJEU said that the text did not differ from the text which was approved by Parliament and the provision was valid.


The CJEU’s decision in this case concerns the correct application of the provisions in the current VAT Directive, however, change is on the horizon. The European Commission has acknowledged technological advances and on 1 December 2016 set out proposals to amend the VAT Directive and grant all Member States the possibility to apply the same VAT rates to electronically supplied publications. This is in line with the Commission’s 2016 Action Plan on VAT and its commitment to keep pace with the challenges of today’s digital economy. The date for the proposals to take effect has not yet been confirmed.

Brexit may also have a significant impact on developments in this area in the UK. Following exit from the EU, the UK Government will be able to independently legislate on zero and reduced rates of VAT.

A copy of the judgment is available to view here.